On September 7, 2018, the Securities and Exchange Commission (SEC) charged Contrarian Investments, LLC (Contrarian) with violating the federal securities laws. Contrarian was one of a number of organizations formed pursuant to a 2015 Nevada state law that, for the first time, allowed Nevada-based entities to collect and pool money from investors anywhere in the world for purposes of sports wagering. Entities like Contrarian promoted their investment opportunities as functioning like mutual funds.

According to the SEC's complaint, filed in federal district court for the District of Nevada, in 2015 Nevada passed a law allowing entities to solicit and collect funds from individual investors anywhere in the world, aggregate those funds, place wagers on certain sporting events, and split the wagering profits among the investors. In 2016 and 2017, Contrarian raised over $400,000 from more than 30 investors. Contrarian conducted a general solicitation by widely offering its investment opportunity on the internet and further failed to make a determination regarding whether all of its investors were accredited.

The Complaint charges Contrarian with conducting an unregistered offering of securities in violation of Sections 5(a) and 5(c) of the Securities Act of 1933. The Commission accepted Contrarian's offer of settlement in which, without admitting or denying the Commission's findings, it consented to the entry of a judgment ordering a permanent injunction against future violation of Sections 5(a) and 5(c) and requiring it to send a copy of the final judgment to each investor.

The SEC's investigation was conducted by William S. Dixon. The case was supervised by Natalie M. Brunson and Aaron W. Lipson, with the litigation overseen by W. Shawn Murnahan and M. Graham Loomis. The SEC appreciates the assistance of the Securities Division of Nevada's Secretary of State's Office.